Knowing your ASP from your SaaS

Thomas Otter kicked off a debate earlier this week on whether SaaS is anything more than a re-branding of ASP. Plenty of people disagreed with him, and certainly a lot of excellent work has been done on this – thanks in particular to Jim Holincheck of Gartner for his detailed definition of SaaS. Jason Wood, too, is very good on SaaS adoption – and also on the performance of that doyen of SaaS, Salesforce.com.

But I still think that Thomas has a point, although it may not be quite the one he wanted to make: from the customer’s viewpoint, SaaS looks very much like ASP, mostly because the differences are couched in obscure, technical language. One of the key differentiators between SaaS and ASP is that the former is multi-tenanted, while the latter is not. So what? From the point of view of the supplier and the VCs funding them, there are great benefits (e.g. ease of deployment and maintenance of code), but as the customer doesn’t see the other customers sharing their multi-tenanted environment, what difference does it make?

Of course the customer gets plenty of benefit from SaaS, but those benefits need to be made explicit, rather than relying on the buzzword to do the explaining for us.

So when talking to customers, let’s dwell on the benefits of hosting vs. installing, or configuring vs customizing, and of sharing a software platform rather than having a unique, bespoke codebase. And the client will probably want to know about the subscription model, too.

Okay, having this conversation takes a lot longer than casually dropping a funky FLA, but at least it’s clear to both sides what we’re talking about.